Apple iPhone 4 recall? Don’t bet on it

A major bookmaker in Ireland called Paddy Power is taking bets that the iPhone 4 will be recalled some time this year. The odds set out by the company have slowly shrunk over the past few hours, from 4 to 6 (60 percent chance of recall), to 4 to 5 (55 percent), and now to even odds. Evidently, Paddy Power is coming ’round to realize that betting on an iPhone 4 recall might not be that smart.

The reason the question has been raised in the first place (in case you missed the call) is that the iPhone 4 appears to have a wee antenna problem: If you hold the phone in a certain way, call quality drops. That product quirk was widely reported soon after the iPhone 4 debuted, but it’s garnering new attention now that Consumer Reports has declared that it can’t recommend the device because of the problem.

[ Also on InfoWorld: How the iPhone 4 could be Apple’s Waterloo | Find out how to say yes to (almost) any smartphone in InfoWorld’s special report. | Keep up on key mobile developments and insights with the Mobile Edge blog and Mobilize newsletter. ]

So why would I disregard the odds laid out by a well-established bookmaker (and possibly risk having my thumbs broken)? Well, there are a couple of reasons.

First, despite comparisons to the debacle concerning the Toyota Prius or explosive laptop PCs, the flaw with the iPhone 4 doesn’t represent a safety hazard. It doesn’t render the phone useless, either. At worst, it’s an inconvenience. There’s no reason Apple would be legally forced to recall the device.

As for a voluntary recall, that would cost Apple an estimated $1.5 billion, according to Bernstein Research analyst Toni Sacconaghi. Plus, it would tarnish the company’s sterling reputation, which would also be quite costly. A voluntary recall is akin to saying, “Wow, we really blew it.” Can anyone really envision Apple saying that? The closest the company has come so far has been saying it was “stunned” to discover a software flaw for determining reception bars on its phone.

Beyond that, financial analysts haven’t clamored to drop Apple stock to the Dump Now list, nor have they predicted a recall, though some agree that Apple should offer a free fix, such as a bumper to cover the antenna. When it comes to odds regarding publicly traded companies, I’ll go with the pros who know stocks as opposed to sports. (Buying stock in a duct tape company might not be a bad idea, though.)

If you’re dubious of recommendation from stock gurus, consider that Consumer Reports — which has garnered a reputation for being a reliable and unbiased source of reviews and information about all manner of products — didn’t push Apple to recall the iPhone, just to fix it free of charge. On a side note, the publication is also being flamed to a crisp by some Apple defenders, accusing CR of extreme bias for shining a spotlight on the iPhone antenna flaw and not giving the device a high recommendation.

Additionally, iPhone users don’t appear to be pushing for a recall, either. According to BMO Capital’s Keith Bachman, demand for the iPhone remains high, and the number of devices that have been returned to stores has been negligible.

The bottom line is that, whereas the Apple iPhone 4 does have a flaw that likely can’t be patched with software but can be remedied with a protective case, a bumper, or duct tape, there’s no compelling reason to expect a recall.

This article, “Apple iPhone 4 recall? Don’t bet on it,” was originally published at InfoWorld.com. Get the first word on what the important tech news really means with the InfoWorld Tech Watch blog.